State’s affordable housing law suffers two public setbacks

The state’s Chapter 40B affordable housing law – one of the few statutes that many people who aren’t lawyers or legislators can quote by name – just suffered a couple well-publicized setbacks in the past two weeks.

First, we heard about the bankruptcy filing of Erickson Retirement Communities, the developer of the Linden Ponds retirement complex in Hingham. The issue of whether the project was eligible for Chapter 40B – the law allows developers to sidestep local zoning limits if a certain portion of a project is deemed to be affordable – was resolved in Erickson’s favor by the state Supreme Judicial Court in January 2003.

But the bankruptcy filing raises an important question: Was Erickson allowed to build too many units in Hingham? The company was permitted for more than 1,700 units, but has only been able to build roughly half that amount as a slowdown in the housing market has curbed Linden Ponds’ efforts to bring in new residents (who bring with them average deposits of $280,000 apiece). At least there aren’t many units that are sitting vacant: The occupancy rate is nearly 90 percent, partly because Erickson and its not-for-profit partner had halted any new construction at the site.

Then there was the news that the developers behind the Turtle Crossing condo complex in Braintree agreed to pay $2.25 million to settle an investigation with Attorney General Martha Coakley’s office. Coakley was investigating whether the developers used some financial tricks to keep their reported profits under a cap of 20 percent on the profits they could make for the 201-unit complex.

It’s important to note that the development firm – which is affiliated with local developers Edward A. Fish and Francis X. Messina – did sell roughly 50 units at below-market rate prices to some very happy home buyers in 2004. But the fact that Chapter 40B helped bring some affordable homes to Braintree has now been overshadowed by reports that the developers allegedly downplayed their reported profits to stay within that mandated cap.

Chapter 40B continues to play an important role in ensuring that the new homes that are built in this state aren’t just for wealthy people. But the law has allowed some developers to take advantage of suburban towns by, among other things, shoehorning in projects that are too big for their proposed locations. A grass roots efforts to repeal key sections of Chapter 40B has been revived after the law’s critics failed to get enough signatures to put the question on the ballot two years ago. The latest stories involving Linden Ponds and Turtle Crossing will inevitably provide extra ammunition for the law’s critics as they try to get the signatures they need this time around.